united states securities and exchange commission d.c. 20549-4561 · 2012. 3. 9. · united states...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION FINANCE February 22,2012 Michael J. O'Brien Omnicom Group Inc. [email protected] Re: Omnicom Group Inc. Incoming letter dated January 23,2012 Dear Mr. O'Brien: This is in response to your letter dated January 23,2012 concerning the shareholder proposal submitted to Omnicom by the New York City Employees' Retirement System, the New York City Fire Department Pension Fund, the New York City Teachers' Retirement System, the New York City Police Pension Fund, and the New York City Board of Education Retirement System. We also have received a letter on the proponents' behalf dated February 22, 2012. Copies of all of the correspondence on which this response is based will be made available on our website at htt.p://www.sec.gov/divisions/corpfinlcf-noactionl14a-8.shtml. For your reference, a brief discussion of the Division's informal procedures regarding shareholder proposals is also available at the same website address. Sincerely, TedYu Senior Special Counsel Enclosure cc: Richard S. Simon The City of New York Office of the Comptroller [email protected]

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Page 1: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON DC 20549-4561

QIVISIONOF CORPORATION FINANCE

February 222012

Michael J OBrien Omnicom Group Inc michaelobrienomnicomgroupcom

Re Omnicom Group Inc Incoming letter dated January 232012

Dear Mr OBrien

This is in response to your letter dated January 232012 concerning the shareholder proposal submitted to Omnicom by the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board ofEducation Retirement System We also have received a letter on the proponents behalf dated February 22 2012 Copies ofall ofthe correspondence on which this response is based will be made available on our website at httpwwwsecgovdivisionscorpfinlcf-noactionl14a-8shtml For your reference a brief discussion ofthe Divisions informal procedures regarding shareholder proposals is also available at the same website address

Sincerely

TedYu Senior Special Counsel

Enclosure

cc Richard S Simon The City ofNew York Office ofthe Comptroller rsimoncomptrollernycgov

February 22 2012

Response of the Office of Chief Counsel Division of Corporation Finance

Re Omnicom Group Inc Incoming letter dated January 232012

The proposal relates to a report

We are unable to concur in your view that Omnicom may exclude the proposal under rules 14a-8(b) and 14a-8(f) In this regard we note the representation that BNY Mellon Asset Servicing is a department ofThe Bank ofNew York Mellon a DTC participant Accordingly we do not believe that Omnicom may omit the proposal from its proxy materials in reliance on rules 14a-8(b) and 14a-8(f)

Sincerely

Matt S McNair Attorney-Adviser

DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARDING SHAREHOLDER PRQPOSALS

The Division of Corporation Finance believes that its responsibility witlJ respect to matters arising under Rule 14a-8 [17 CFR 24014a-8] as with other matters under the proxy rules is to aid those who must comply with the rule by offering informal advice and suggestions and to determine initially whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission In connection with a shareholder proposal under Rule 14a-8 the Divisions staff considers the information furnished to it by the Company in support of its intention to exclude the proposals from the Companys proxy materials alt well as any information furnished by the proponent or the proponents representative

Although Rule 14a-8(k) does not require any communications fromsharehqlders to the Commissions staff the staff will always consider information concerning alleged violations of the statutes administered by the Commission including argument as to whether or notactivities proposed to be taken would be violative of the statute or rule involved The receipt by the staff of such infomiation however should not be construed as changing the staffs informal procedures and proxy review into a formal or adversary procedure

It is important to note that the staffs and Commissions no-action responses to Rule 14a-8(j) submissions reflect only infomlal views The determinations reached in these noshyaction letters do not and cannot adjudicate the merits of a companys position with respect to the proposaL Only a court such as a US District Court can decide whether a company is obligated to include shareholder proposals in its proxy materials Accordingly a discretionary determination not to recommend or take Commission enforcement action does not preclude a

proponent or any shareholder ofacompruIy from pursuing any rights he or she may have against the company in court should the management omit the proposal from the companys proxy materiaL

THE CITY OFNCWYORK TELEPHONE (212) 669-4~8 OFFICE OF THE COMPTROLLER FAX NUMBER (212) 81 amp8663

1 CENTRE STREET ROOM 1120 EMAIL RSIMONCOMPTROLLERNYCGoVNEWYORKNY10007~2341

JOHNCL1U~ichard SSimoJl COMPTROLLERDepUty Generat (ounsel

February 22 2012 BYEMAIL

Securities and Exchange Commission Division of Corporation Finance Office of the Chief Counsel 100 F Street NE Washington DC 20549

Re Omnicom Group Inc Shareholder Proposal submitted by the New York City Pension Funds

To Whom It May Concern

I write on behalfofthe New YorkCityPension Funds (the Funds) in response to the January 23 2012 letter (the Company Letter) submitted to the Securities and Exchange Commission by Bryan Miller ofthe firm of Latham amp Watkins outside counsel for Omnicom GroupJnctOronicom or the Company) which seeks assurancethat the StaffoftlJe Division of Corporation Finance (the Staff) wiILnot recommend any enforcement action if the Company excludes from its proxy statement for the 2012 annual meeting the Fll11dsshareholder proposal (the Proposal )

I have reviewed the Proposal as well as the Companys Letter Based upon that review as well asareview ofRllle 14a8 it is my opinion that the Proposal may not be omitted from the Companys 2012 Proxy Materials TheProposal which relates to workforce diversity wa$ propedYaCcQrilpanied by proofs ofshare holding that came directly from TheSankofNew York Mellon the listed DTC participant which holds the Omnicom shares fQrthe Furtds Accordirlgly the Funds respectfully request that the Commission deny thereliefthat theCompahyseeks

NYC Flll1ds Resppnse to OnmicQm Letter February222012 Page2of3

I The Proposal

The Proposal seeksareport on workforce diversity The content ofthe Proposal does not middotimpact the basis foromi$sion cited in theC()mpanysno-action request

II Discussion

The Company has challenged the Proposal on the foll()wingground Rules 14a- 8(b) and (f) (in~dequate proofof shareholding) For the reasons set forth below the Funds submit that the Company has failed to meet its burden ofproving its entitlement to no-action~ relief

A THE FUNDSPROOF OF SHAREOWNERSBIP FROM A DTC PARTICIPANTCOMPLIES WITH RULES 14A-8(B) AND (F)

The Company makes a key factual error in claiming that the Funds proofs ofshare ownership did not come directly Jrom a DTCparticipantas required by Rules 14a-8(b)and W and as most recently clarified in StaffLegal Bulletin 14F (Oct 182011) The Company bases its erron~us conclusion on the fact that the wor~s Asset SerVicing appear in smaller letters under the name BNY Mellon atthe topoftheJetterhcadon which the Funds original November 29201 1 and resubmitted December 16 2Ql1 proofs ofshare ownerShip appear The Company incorrectly asserts Because BNY Mellon Asset Servicing did notappear on the DTC ParticJpant List therefore the DeceIllber 16 Broker Letters are not from the record holder ofthe shares and thus are not sufficient proof ofownership under Rule 14ashy8(b)(2)(i) See Company Letterat pp 2-3 That error results from the Companys incorrect assumption that BNY Mellon followed by Asset Servicing is the name ofa legal entity separate from the DTC Participant The Bank QfNew York Mellon

In factas set forth in the attached letter dated January 32012 from The BaIlkofNew York Mellon forwarded to counselmiddotforthe Company on January 182012 the Funds proof of ownership letters for its proposals comeditectlyfrom The BankofNew Y orkMellon DTt Participant 90 1~ whichholds the OmnicoIQshares for the Funds BNY Mellon Asset Servicing is simply JUlunincorporated departme~t ofThe Bank ofNew YorkMellon and is not a subsidiary otseparately incorporated Aletterfrom the Asset Servicingdepartnlentof The Bank pfNew York Mellon comes directJy fr9l11the Bank ofNew York MeUonjustas surely as a letter frOm the Omnicom Group mc Office ofthe General Counsel wouldcome directly from Omnicom The Funds bad initially clarifi~d this point for the Company in the attachedDecembermiddot22~ 2012 letter directly ftom theoodersigned to counsel for the Comp~y and then did so~ain time with a copy of the BanksJanlary 3 3012 letter on that point

bull As indicated in the2010 Form 10K for the Bank ofNewYor~MellonBNYMellon is siinplythe shorter version oftheoffictat nameThe Bank ofNew Yorldv1eIJon the Form lOK begins This Fenn lO-K filed by The Bank ofNew Yor~ Mellon Corporation (BNYMellort or the Company) See httpwwwbnymeUoncominvestorrelationstinanciaJreportsf20 1011 oIdo1Opdf

2

NYCFunds~ Re~ponse to OmnicOln Letter Fcentbtilary~2 2012 Page30f3

Accordingly from ijqember292Qllonward$4Je FOnds proofs of oWIlership have never lieen defective butrather have fully complie1iwithRuleJ4a8(b)asperthe Staff~

advicejn8LB 14Fthat for Rule 14a-$(b)(2)(i)pl1tpQseso~lY DTC p~cipantsshouldbe viewedilS te~ord holdersofsecunties that ate deposited atDTC

Because the Funtisect proofofoWireiship letters did come directly from The Bank of New York Mellonmiddot a 1istedDTCparticipantthe Companysrequest for noaction reliefQn that ground should be denied

m ConClusion

For the reasons set forth above the Ftinds respectfullY request that the Companys request for ilO-action teliefbe denied

Thank you for your consideration

Sincerely

Cc BrianD Miller Esq Latham amp Watkins Suite 100Q 555 Eleventh Street NW Washington DC 20004-1304

3

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 2: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

February 22 2012

Response of the Office of Chief Counsel Division of Corporation Finance

Re Omnicom Group Inc Incoming letter dated January 232012

The proposal relates to a report

We are unable to concur in your view that Omnicom may exclude the proposal under rules 14a-8(b) and 14a-8(f) In this regard we note the representation that BNY Mellon Asset Servicing is a department ofThe Bank ofNew York Mellon a DTC participant Accordingly we do not believe that Omnicom may omit the proposal from its proxy materials in reliance on rules 14a-8(b) and 14a-8(f)

Sincerely

Matt S McNair Attorney-Adviser

DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARDING SHAREHOLDER PRQPOSALS

The Division of Corporation Finance believes that its responsibility witlJ respect to matters arising under Rule 14a-8 [17 CFR 24014a-8] as with other matters under the proxy rules is to aid those who must comply with the rule by offering informal advice and suggestions and to determine initially whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission In connection with a shareholder proposal under Rule 14a-8 the Divisions staff considers the information furnished to it by the Company in support of its intention to exclude the proposals from the Companys proxy materials alt well as any information furnished by the proponent or the proponents representative

Although Rule 14a-8(k) does not require any communications fromsharehqlders to the Commissions staff the staff will always consider information concerning alleged violations of the statutes administered by the Commission including argument as to whether or notactivities proposed to be taken would be violative of the statute or rule involved The receipt by the staff of such infomiation however should not be construed as changing the staffs informal procedures and proxy review into a formal or adversary procedure

It is important to note that the staffs and Commissions no-action responses to Rule 14a-8(j) submissions reflect only infomlal views The determinations reached in these noshyaction letters do not and cannot adjudicate the merits of a companys position with respect to the proposaL Only a court such as a US District Court can decide whether a company is obligated to include shareholder proposals in its proxy materials Accordingly a discretionary determination not to recommend or take Commission enforcement action does not preclude a

proponent or any shareholder ofacompruIy from pursuing any rights he or she may have against the company in court should the management omit the proposal from the companys proxy materiaL

THE CITY OFNCWYORK TELEPHONE (212) 669-4~8 OFFICE OF THE COMPTROLLER FAX NUMBER (212) 81 amp8663

1 CENTRE STREET ROOM 1120 EMAIL RSIMONCOMPTROLLERNYCGoVNEWYORKNY10007~2341

JOHNCL1U~ichard SSimoJl COMPTROLLERDepUty Generat (ounsel

February 22 2012 BYEMAIL

Securities and Exchange Commission Division of Corporation Finance Office of the Chief Counsel 100 F Street NE Washington DC 20549

Re Omnicom Group Inc Shareholder Proposal submitted by the New York City Pension Funds

To Whom It May Concern

I write on behalfofthe New YorkCityPension Funds (the Funds) in response to the January 23 2012 letter (the Company Letter) submitted to the Securities and Exchange Commission by Bryan Miller ofthe firm of Latham amp Watkins outside counsel for Omnicom GroupJnctOronicom or the Company) which seeks assurancethat the StaffoftlJe Division of Corporation Finance (the Staff) wiILnot recommend any enforcement action if the Company excludes from its proxy statement for the 2012 annual meeting the Fll11dsshareholder proposal (the Proposal )

I have reviewed the Proposal as well as the Companys Letter Based upon that review as well asareview ofRllle 14a8 it is my opinion that the Proposal may not be omitted from the Companys 2012 Proxy Materials TheProposal which relates to workforce diversity wa$ propedYaCcQrilpanied by proofs ofshare holding that came directly from TheSankofNew York Mellon the listed DTC participant which holds the Omnicom shares fQrthe Furtds Accordirlgly the Funds respectfully request that the Commission deny thereliefthat theCompahyseeks

NYC Flll1ds Resppnse to OnmicQm Letter February222012 Page2of3

I The Proposal

The Proposal seeksareport on workforce diversity The content ofthe Proposal does not middotimpact the basis foromi$sion cited in theC()mpanysno-action request

II Discussion

The Company has challenged the Proposal on the foll()wingground Rules 14a- 8(b) and (f) (in~dequate proofof shareholding) For the reasons set forth below the Funds submit that the Company has failed to meet its burden ofproving its entitlement to no-action~ relief

A THE FUNDSPROOF OF SHAREOWNERSBIP FROM A DTC PARTICIPANTCOMPLIES WITH RULES 14A-8(B) AND (F)

The Company makes a key factual error in claiming that the Funds proofs ofshare ownership did not come directly Jrom a DTCparticipantas required by Rules 14a-8(b)and W and as most recently clarified in StaffLegal Bulletin 14F (Oct 182011) The Company bases its erron~us conclusion on the fact that the wor~s Asset SerVicing appear in smaller letters under the name BNY Mellon atthe topoftheJetterhcadon which the Funds original November 29201 1 and resubmitted December 16 2Ql1 proofs ofshare ownerShip appear The Company incorrectly asserts Because BNY Mellon Asset Servicing did notappear on the DTC ParticJpant List therefore the DeceIllber 16 Broker Letters are not from the record holder ofthe shares and thus are not sufficient proof ofownership under Rule 14ashy8(b)(2)(i) See Company Letterat pp 2-3 That error results from the Companys incorrect assumption that BNY Mellon followed by Asset Servicing is the name ofa legal entity separate from the DTC Participant The Bank QfNew York Mellon

In factas set forth in the attached letter dated January 32012 from The BaIlkofNew York Mellon forwarded to counselmiddotforthe Company on January 182012 the Funds proof of ownership letters for its proposals comeditectlyfrom The BankofNew Y orkMellon DTt Participant 90 1~ whichholds the OmnicoIQshares for the Funds BNY Mellon Asset Servicing is simply JUlunincorporated departme~t ofThe Bank ofNew YorkMellon and is not a subsidiary otseparately incorporated Aletterfrom the Asset Servicingdepartnlentof The Bank pfNew York Mellon comes directJy fr9l11the Bank ofNew York MeUonjustas surely as a letter frOm the Omnicom Group mc Office ofthe General Counsel wouldcome directly from Omnicom The Funds bad initially clarifi~d this point for the Company in the attachedDecembermiddot22~ 2012 letter directly ftom theoodersigned to counsel for the Comp~y and then did so~ain time with a copy of the BanksJanlary 3 3012 letter on that point

bull As indicated in the2010 Form 10K for the Bank ofNewYor~MellonBNYMellon is siinplythe shorter version oftheoffictat nameThe Bank ofNew Yorldv1eIJon the Form lOK begins This Fenn lO-K filed by The Bank ofNew Yor~ Mellon Corporation (BNYMellort or the Company) See httpwwwbnymeUoncominvestorrelationstinanciaJreportsf20 1011 oIdo1Opdf

2

NYCFunds~ Re~ponse to OmnicOln Letter Fcentbtilary~2 2012 Page30f3

Accordingly from ijqember292Qllonward$4Je FOnds proofs of oWIlership have never lieen defective butrather have fully complie1iwithRuleJ4a8(b)asperthe Staff~

advicejn8LB 14Fthat for Rule 14a-$(b)(2)(i)pl1tpQseso~lY DTC p~cipantsshouldbe viewedilS te~ord holdersofsecunties that ate deposited atDTC

Because the Funtisect proofofoWireiship letters did come directly from The Bank of New York Mellonmiddot a 1istedDTCparticipantthe Companysrequest for noaction reliefQn that ground should be denied

m ConClusion

For the reasons set forth above the Ftinds respectfullY request that the Companys request for ilO-action teliefbe denied

Thank you for your consideration

Sincerely

Cc BrianD Miller Esq Latham amp Watkins Suite 100Q 555 Eleventh Street NW Washington DC 20004-1304

3

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 3: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARDING SHAREHOLDER PRQPOSALS

The Division of Corporation Finance believes that its responsibility witlJ respect to matters arising under Rule 14a-8 [17 CFR 24014a-8] as with other matters under the proxy rules is to aid those who must comply with the rule by offering informal advice and suggestions and to determine initially whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission In connection with a shareholder proposal under Rule 14a-8 the Divisions staff considers the information furnished to it by the Company in support of its intention to exclude the proposals from the Companys proxy materials alt well as any information furnished by the proponent or the proponents representative

Although Rule 14a-8(k) does not require any communications fromsharehqlders to the Commissions staff the staff will always consider information concerning alleged violations of the statutes administered by the Commission including argument as to whether or notactivities proposed to be taken would be violative of the statute or rule involved The receipt by the staff of such infomiation however should not be construed as changing the staffs informal procedures and proxy review into a formal or adversary procedure

It is important to note that the staffs and Commissions no-action responses to Rule 14a-8(j) submissions reflect only infomlal views The determinations reached in these noshyaction letters do not and cannot adjudicate the merits of a companys position with respect to the proposaL Only a court such as a US District Court can decide whether a company is obligated to include shareholder proposals in its proxy materials Accordingly a discretionary determination not to recommend or take Commission enforcement action does not preclude a

proponent or any shareholder ofacompruIy from pursuing any rights he or she may have against the company in court should the management omit the proposal from the companys proxy materiaL

THE CITY OFNCWYORK TELEPHONE (212) 669-4~8 OFFICE OF THE COMPTROLLER FAX NUMBER (212) 81 amp8663

1 CENTRE STREET ROOM 1120 EMAIL RSIMONCOMPTROLLERNYCGoVNEWYORKNY10007~2341

JOHNCL1U~ichard SSimoJl COMPTROLLERDepUty Generat (ounsel

February 22 2012 BYEMAIL

Securities and Exchange Commission Division of Corporation Finance Office of the Chief Counsel 100 F Street NE Washington DC 20549

Re Omnicom Group Inc Shareholder Proposal submitted by the New York City Pension Funds

To Whom It May Concern

I write on behalfofthe New YorkCityPension Funds (the Funds) in response to the January 23 2012 letter (the Company Letter) submitted to the Securities and Exchange Commission by Bryan Miller ofthe firm of Latham amp Watkins outside counsel for Omnicom GroupJnctOronicom or the Company) which seeks assurancethat the StaffoftlJe Division of Corporation Finance (the Staff) wiILnot recommend any enforcement action if the Company excludes from its proxy statement for the 2012 annual meeting the Fll11dsshareholder proposal (the Proposal )

I have reviewed the Proposal as well as the Companys Letter Based upon that review as well asareview ofRllle 14a8 it is my opinion that the Proposal may not be omitted from the Companys 2012 Proxy Materials TheProposal which relates to workforce diversity wa$ propedYaCcQrilpanied by proofs ofshare holding that came directly from TheSankofNew York Mellon the listed DTC participant which holds the Omnicom shares fQrthe Furtds Accordirlgly the Funds respectfully request that the Commission deny thereliefthat theCompahyseeks

NYC Flll1ds Resppnse to OnmicQm Letter February222012 Page2of3

I The Proposal

The Proposal seeksareport on workforce diversity The content ofthe Proposal does not middotimpact the basis foromi$sion cited in theC()mpanysno-action request

II Discussion

The Company has challenged the Proposal on the foll()wingground Rules 14a- 8(b) and (f) (in~dequate proofof shareholding) For the reasons set forth below the Funds submit that the Company has failed to meet its burden ofproving its entitlement to no-action~ relief

A THE FUNDSPROOF OF SHAREOWNERSBIP FROM A DTC PARTICIPANTCOMPLIES WITH RULES 14A-8(B) AND (F)

The Company makes a key factual error in claiming that the Funds proofs ofshare ownership did not come directly Jrom a DTCparticipantas required by Rules 14a-8(b)and W and as most recently clarified in StaffLegal Bulletin 14F (Oct 182011) The Company bases its erron~us conclusion on the fact that the wor~s Asset SerVicing appear in smaller letters under the name BNY Mellon atthe topoftheJetterhcadon which the Funds original November 29201 1 and resubmitted December 16 2Ql1 proofs ofshare ownerShip appear The Company incorrectly asserts Because BNY Mellon Asset Servicing did notappear on the DTC ParticJpant List therefore the DeceIllber 16 Broker Letters are not from the record holder ofthe shares and thus are not sufficient proof ofownership under Rule 14ashy8(b)(2)(i) See Company Letterat pp 2-3 That error results from the Companys incorrect assumption that BNY Mellon followed by Asset Servicing is the name ofa legal entity separate from the DTC Participant The Bank QfNew York Mellon

In factas set forth in the attached letter dated January 32012 from The BaIlkofNew York Mellon forwarded to counselmiddotforthe Company on January 182012 the Funds proof of ownership letters for its proposals comeditectlyfrom The BankofNew Y orkMellon DTt Participant 90 1~ whichholds the OmnicoIQshares for the Funds BNY Mellon Asset Servicing is simply JUlunincorporated departme~t ofThe Bank ofNew YorkMellon and is not a subsidiary otseparately incorporated Aletterfrom the Asset Servicingdepartnlentof The Bank pfNew York Mellon comes directJy fr9l11the Bank ofNew York MeUonjustas surely as a letter frOm the Omnicom Group mc Office ofthe General Counsel wouldcome directly from Omnicom The Funds bad initially clarifi~d this point for the Company in the attachedDecembermiddot22~ 2012 letter directly ftom theoodersigned to counsel for the Comp~y and then did so~ain time with a copy of the BanksJanlary 3 3012 letter on that point

bull As indicated in the2010 Form 10K for the Bank ofNewYor~MellonBNYMellon is siinplythe shorter version oftheoffictat nameThe Bank ofNew Yorldv1eIJon the Form lOK begins This Fenn lO-K filed by The Bank ofNew Yor~ Mellon Corporation (BNYMellort or the Company) See httpwwwbnymeUoncominvestorrelationstinanciaJreportsf20 1011 oIdo1Opdf

2

NYCFunds~ Re~ponse to OmnicOln Letter Fcentbtilary~2 2012 Page30f3

Accordingly from ijqember292Qllonward$4Je FOnds proofs of oWIlership have never lieen defective butrather have fully complie1iwithRuleJ4a8(b)asperthe Staff~

advicejn8LB 14Fthat for Rule 14a-$(b)(2)(i)pl1tpQseso~lY DTC p~cipantsshouldbe viewedilS te~ord holdersofsecunties that ate deposited atDTC

Because the Funtisect proofofoWireiship letters did come directly from The Bank of New York Mellonmiddot a 1istedDTCparticipantthe Companysrequest for noaction reliefQn that ground should be denied

m ConClusion

For the reasons set forth above the Ftinds respectfullY request that the Companys request for ilO-action teliefbe denied

Thank you for your consideration

Sincerely

Cc BrianD Miller Esq Latham amp Watkins Suite 100Q 555 Eleventh Street NW Washington DC 20004-1304

3

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 4: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

THE CITY OFNCWYORK TELEPHONE (212) 669-4~8 OFFICE OF THE COMPTROLLER FAX NUMBER (212) 81 amp8663

1 CENTRE STREET ROOM 1120 EMAIL RSIMONCOMPTROLLERNYCGoVNEWYORKNY10007~2341

JOHNCL1U~ichard SSimoJl COMPTROLLERDepUty Generat (ounsel

February 22 2012 BYEMAIL

Securities and Exchange Commission Division of Corporation Finance Office of the Chief Counsel 100 F Street NE Washington DC 20549

Re Omnicom Group Inc Shareholder Proposal submitted by the New York City Pension Funds

To Whom It May Concern

I write on behalfofthe New YorkCityPension Funds (the Funds) in response to the January 23 2012 letter (the Company Letter) submitted to the Securities and Exchange Commission by Bryan Miller ofthe firm of Latham amp Watkins outside counsel for Omnicom GroupJnctOronicom or the Company) which seeks assurancethat the StaffoftlJe Division of Corporation Finance (the Staff) wiILnot recommend any enforcement action if the Company excludes from its proxy statement for the 2012 annual meeting the Fll11dsshareholder proposal (the Proposal )

I have reviewed the Proposal as well as the Companys Letter Based upon that review as well asareview ofRllle 14a8 it is my opinion that the Proposal may not be omitted from the Companys 2012 Proxy Materials TheProposal which relates to workforce diversity wa$ propedYaCcQrilpanied by proofs ofshare holding that came directly from TheSankofNew York Mellon the listed DTC participant which holds the Omnicom shares fQrthe Furtds Accordirlgly the Funds respectfully request that the Commission deny thereliefthat theCompahyseeks

NYC Flll1ds Resppnse to OnmicQm Letter February222012 Page2of3

I The Proposal

The Proposal seeksareport on workforce diversity The content ofthe Proposal does not middotimpact the basis foromi$sion cited in theC()mpanysno-action request

II Discussion

The Company has challenged the Proposal on the foll()wingground Rules 14a- 8(b) and (f) (in~dequate proofof shareholding) For the reasons set forth below the Funds submit that the Company has failed to meet its burden ofproving its entitlement to no-action~ relief

A THE FUNDSPROOF OF SHAREOWNERSBIP FROM A DTC PARTICIPANTCOMPLIES WITH RULES 14A-8(B) AND (F)

The Company makes a key factual error in claiming that the Funds proofs ofshare ownership did not come directly Jrom a DTCparticipantas required by Rules 14a-8(b)and W and as most recently clarified in StaffLegal Bulletin 14F (Oct 182011) The Company bases its erron~us conclusion on the fact that the wor~s Asset SerVicing appear in smaller letters under the name BNY Mellon atthe topoftheJetterhcadon which the Funds original November 29201 1 and resubmitted December 16 2Ql1 proofs ofshare ownerShip appear The Company incorrectly asserts Because BNY Mellon Asset Servicing did notappear on the DTC ParticJpant List therefore the DeceIllber 16 Broker Letters are not from the record holder ofthe shares and thus are not sufficient proof ofownership under Rule 14ashy8(b)(2)(i) See Company Letterat pp 2-3 That error results from the Companys incorrect assumption that BNY Mellon followed by Asset Servicing is the name ofa legal entity separate from the DTC Participant The Bank QfNew York Mellon

In factas set forth in the attached letter dated January 32012 from The BaIlkofNew York Mellon forwarded to counselmiddotforthe Company on January 182012 the Funds proof of ownership letters for its proposals comeditectlyfrom The BankofNew Y orkMellon DTt Participant 90 1~ whichholds the OmnicoIQshares for the Funds BNY Mellon Asset Servicing is simply JUlunincorporated departme~t ofThe Bank ofNew YorkMellon and is not a subsidiary otseparately incorporated Aletterfrom the Asset Servicingdepartnlentof The Bank pfNew York Mellon comes directJy fr9l11the Bank ofNew York MeUonjustas surely as a letter frOm the Omnicom Group mc Office ofthe General Counsel wouldcome directly from Omnicom The Funds bad initially clarifi~d this point for the Company in the attachedDecembermiddot22~ 2012 letter directly ftom theoodersigned to counsel for the Comp~y and then did so~ain time with a copy of the BanksJanlary 3 3012 letter on that point

bull As indicated in the2010 Form 10K for the Bank ofNewYor~MellonBNYMellon is siinplythe shorter version oftheoffictat nameThe Bank ofNew Yorldv1eIJon the Form lOK begins This Fenn lO-K filed by The Bank ofNew Yor~ Mellon Corporation (BNYMellort or the Company) See httpwwwbnymeUoncominvestorrelationstinanciaJreportsf20 1011 oIdo1Opdf

2

NYCFunds~ Re~ponse to OmnicOln Letter Fcentbtilary~2 2012 Page30f3

Accordingly from ijqember292Qllonward$4Je FOnds proofs of oWIlership have never lieen defective butrather have fully complie1iwithRuleJ4a8(b)asperthe Staff~

advicejn8LB 14Fthat for Rule 14a-$(b)(2)(i)pl1tpQseso~lY DTC p~cipantsshouldbe viewedilS te~ord holdersofsecunties that ate deposited atDTC

Because the Funtisect proofofoWireiship letters did come directly from The Bank of New York Mellonmiddot a 1istedDTCparticipantthe Companysrequest for noaction reliefQn that ground should be denied

m ConClusion

For the reasons set forth above the Ftinds respectfullY request that the Companys request for ilO-action teliefbe denied

Thank you for your consideration

Sincerely

Cc BrianD Miller Esq Latham amp Watkins Suite 100Q 555 Eleventh Street NW Washington DC 20004-1304

3

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

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Dubai RomeDecember 122011 Frankfurt San Diego

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London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 5: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

NYC Flll1ds Resppnse to OnmicQm Letter February222012 Page2of3

I The Proposal

The Proposal seeksareport on workforce diversity The content ofthe Proposal does not middotimpact the basis foromi$sion cited in theC()mpanysno-action request

II Discussion

The Company has challenged the Proposal on the foll()wingground Rules 14a- 8(b) and (f) (in~dequate proofof shareholding) For the reasons set forth below the Funds submit that the Company has failed to meet its burden ofproving its entitlement to no-action~ relief

A THE FUNDSPROOF OF SHAREOWNERSBIP FROM A DTC PARTICIPANTCOMPLIES WITH RULES 14A-8(B) AND (F)

The Company makes a key factual error in claiming that the Funds proofs ofshare ownership did not come directly Jrom a DTCparticipantas required by Rules 14a-8(b)and W and as most recently clarified in StaffLegal Bulletin 14F (Oct 182011) The Company bases its erron~us conclusion on the fact that the wor~s Asset SerVicing appear in smaller letters under the name BNY Mellon atthe topoftheJetterhcadon which the Funds original November 29201 1 and resubmitted December 16 2Ql1 proofs ofshare ownerShip appear The Company incorrectly asserts Because BNY Mellon Asset Servicing did notappear on the DTC ParticJpant List therefore the DeceIllber 16 Broker Letters are not from the record holder ofthe shares and thus are not sufficient proof ofownership under Rule 14ashy8(b)(2)(i) See Company Letterat pp 2-3 That error results from the Companys incorrect assumption that BNY Mellon followed by Asset Servicing is the name ofa legal entity separate from the DTC Participant The Bank QfNew York Mellon

In factas set forth in the attached letter dated January 32012 from The BaIlkofNew York Mellon forwarded to counselmiddotforthe Company on January 182012 the Funds proof of ownership letters for its proposals comeditectlyfrom The BankofNew Y orkMellon DTt Participant 90 1~ whichholds the OmnicoIQshares for the Funds BNY Mellon Asset Servicing is simply JUlunincorporated departme~t ofThe Bank ofNew YorkMellon and is not a subsidiary otseparately incorporated Aletterfrom the Asset Servicingdepartnlentof The Bank pfNew York Mellon comes directJy fr9l11the Bank ofNew York MeUonjustas surely as a letter frOm the Omnicom Group mc Office ofthe General Counsel wouldcome directly from Omnicom The Funds bad initially clarifi~d this point for the Company in the attachedDecembermiddot22~ 2012 letter directly ftom theoodersigned to counsel for the Comp~y and then did so~ain time with a copy of the BanksJanlary 3 3012 letter on that point

bull As indicated in the2010 Form 10K for the Bank ofNewYor~MellonBNYMellon is siinplythe shorter version oftheoffictat nameThe Bank ofNew Yorldv1eIJon the Form lOK begins This Fenn lO-K filed by The Bank ofNew Yor~ Mellon Corporation (BNYMellort or the Company) See httpwwwbnymeUoncominvestorrelationstinanciaJreportsf20 1011 oIdo1Opdf

2

NYCFunds~ Re~ponse to OmnicOln Letter Fcentbtilary~2 2012 Page30f3

Accordingly from ijqember292Qllonward$4Je FOnds proofs of oWIlership have never lieen defective butrather have fully complie1iwithRuleJ4a8(b)asperthe Staff~

advicejn8LB 14Fthat for Rule 14a-$(b)(2)(i)pl1tpQseso~lY DTC p~cipantsshouldbe viewedilS te~ord holdersofsecunties that ate deposited atDTC

Because the Funtisect proofofoWireiship letters did come directly from The Bank of New York Mellonmiddot a 1istedDTCparticipantthe Companysrequest for noaction reliefQn that ground should be denied

m ConClusion

For the reasons set forth above the Ftinds respectfullY request that the Companys request for ilO-action teliefbe denied

Thank you for your consideration

Sincerely

Cc BrianD Miller Esq Latham amp Watkins Suite 100Q 555 Eleventh Street NW Washington DC 20004-1304

3

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 6: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

NYCFunds~ Re~ponse to OmnicOln Letter Fcentbtilary~2 2012 Page30f3

Accordingly from ijqember292Qllonward$4Je FOnds proofs of oWIlership have never lieen defective butrather have fully complie1iwithRuleJ4a8(b)asperthe Staff~

advicejn8LB 14Fthat for Rule 14a-$(b)(2)(i)pl1tpQseso~lY DTC p~cipantsshouldbe viewedilS te~ord holdersofsecunties that ate deposited atDTC

Because the Funtisect proofofoWireiship letters did come directly from The Bank of New York Mellonmiddot a 1istedDTCparticipantthe Companysrequest for noaction reliefQn that ground should be denied

m ConClusion

For the reasons set forth above the Ftinds respectfullY request that the Companys request for ilO-action teliefbe denied

Thank you for your consideration

Sincerely

Cc BrianD Miller Esq Latham amp Watkins Suite 100Q 555 Eleventh Street NW Washington DC 20004-1304

3

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 7: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

THE CfrYOF NEW YORK 1EtEPHQNE (~12)~69-45~OFFICE OF THE COMPTROLLER fAXNliMBER (212) 81~63

1 CENtRE STREET ROQM H20 EMAILRSIMdNOOMPTROLlERNYCGOVNEW YORK NY 1000Tmiddot2341

JOHNC LlU RichardS SJinQn COtrpTRQll1~R~ltyenner-COmisei

December 22 201 J BY EMAILANOEXPRESSMAlL

Brian D Miller Esq Latham amp Wa~ins LLP 555 Eleventh Street N Wbull Suite 1000 W~ington DC 1P004

Re Oinnicomurt)lp Inc SharellQWer Proposal submitted by the New YorkCjtv Pension Funds

Dear Mr Miller

I am writing in replyto your letter of December 12201 1 to Kenneth Sylvester ofour office co11Cerning the proofofshare ownership fOT thesharehoJderproposai that the Office ofthe Comptroller sent by etterdatedNovember 29 2m ]to Omnicom Group Inc (the Company) on behalfoftne New York City Pension Funds (the NYC Funds) Your lettetqss~nsin-co1Tectly that the verification is defeetiveundermiddotSEC Rule 14a~8 and the October 182011 SEC Staff BuUeiirt 14F (CF) based onyout erroneous assumption thatthe sender is not a DTe participant

SpedfiCll11y the Companysobjection as set forth in youdettef is tbatmiddotBNY Mellon Asset Servicing is rota DTt pai1icipantand ai such it cannot be the record holltietof the Systems securities middot(Letter p 2) Here however proofofownership didcornedirectly from a DTC partkipant Bank ofNew YotkMellon (BNY Mellon) which is the bank c1stodian tor the NYC Funds BNY McllQn hasconfinned to me thatBNYMelion Asset Servicing(SMAS) Wh(lSe name appetrs cjothe JifOofsofowrtershipappended to oUr November 29snbmisltgtiorttothe Cqmpanyis simply a division of aNY MeUonanclis nota separate corporate entity BecahseBMASismeretyaname for a part ofBNY MeUoI1theNYCFunds pUlOrofpwnership comes directly ftomaDTCparticipant BNY Mellon ACcordinglythe proOfofthe NYC Fttnds ownershipinlheCOtlltlarty asmiddot submitted on Novemberg9 satisfiesBEC Rtlle 14a-gb) and SECStaff Blllldin14F in an regards~

Please confirm that in light ofthisjnformation the C0rrlpany withdrawsitso~jection under SHe Rllle 14a~8(b) to the NYC Funds November 29 2011 sllateh6klerproposaL

RiGhard Ssimon

Cc Kenneth SyJVester

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

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Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

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London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 8: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

BNYME1tON

~N( MellonAssetServicfnamp

January3 2012

1oWhOInIt May Concern

Re BNYlWIOD AuetmiddotServicinig

Dear MaQameiSir

Ih~I~r$ tQ celifythalBNYMelioil As$et Servicing Which issues the prQOf ofshareo~rship I_IS for tlieNew York City Pensionmiddot Funds

1) isa departnleJlt of The Bank of t4ew YOrk Mellonithe DTCparUdPitnt(901)which hokl$ the shateson Jehaifofthe New York City Pension FuncfSand

2) ~ notasu~itliary nor s~tely inCorpOrated nor otherwise an entityseparaje from Theaarik of NeVI York MeUpn

Sincerely

~~J~ AliCyen M Tiedemann Vice President

On~ WaUStreet New York NY 10286

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 9: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Omnicom Group Inc

Michael J OBrien Sr Vice Pr9Sident

General Counsel and Secretory

January 23 2012

VIA ELECTRONIC MAIL

Office of the Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street NE Washington DC 20549

Re Shareholder Proposal to Omnicom Group Inc from the Comptroller of the City of New York

Ladies and Gentlemen

This letter is submitted pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934 as amended Omnicom Group Inc (the Company) has received a shareholder proposal and supporting statement attached hereto as Exhibit A (the Shareholder Proposal) from the Comptroller of the City ofNew York (the Comptroller) on behalf of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System the New York City Police Pension Fund and the New York City Board of Education Retirement System (collectively the Proponents) for inclusion in the Companys proxy statement for its 2012 annual meeting of shareholders

The Company hereby advises the staff (the Staff) of the Division of Corporation Finance that it intends to exclude the Shareholder Proposal from its 2012 proxy materials The Company respectfully requests confirmation that the Staff will not recommend enforcement action to the Securities and Exchange Commission (the Commission) if the Company excludes the Shareholder Proposal pursuant to Rules 14a-8(b) and 14a-8(f)(I) because the Comptroller and the Proponents are not registered holders of the Companys securities and have failed to provide proof of their eligibility to submit the Proposal

By copy of this letter we are advising the Comptroller and the Proponents of the Companys intention to exclude the Shareholder Proposal In accordance with Rule 14a-8(j)(2) and Staff Legal Bulletin No 14D we are submitting by electronic mail (i) this letter which sets forth our reasons for excluding the Proposal and (ii) the Proponents letter submitting the Proposal

0015980003 437 Madison Avenue New York NY 10022 (212) 415-3640 Fax (212) 415-3574

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 10: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Pursuant to Rule 14a-80) we are submitting this letter not less than 80 days before the Company intends to file its 2012 proxy materials

The Shareholder Proposal may be excluded pursuant Rules 14a-8(b) and 14a-8(1)(1) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

Rule 14a-8(f)(1) provides that a shareholder proposal may be excluded from a companys proxy materials if the proponent fails to meet the eligibility and procedural requirements of Rule 14a-8(a) through (d) Rule 14a-8(b)(1) provides that in order to be eligible to submit a proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date the shareholder submits the proposal and must continue to hold these securities through the date of the meeting If the proponent is not a registered shareholder the proponent must provide proof of ownership in one of the two methods specified in Rule 14a-8(b)(2)(i) and (ii) Under Rule 14a-8(b)(2)(i) the proponent must submit a written statement from the record holder of the shares verifying that at the time the proponent submitted the proposal the proponent continuously held the shares for at least one year

In Section B3 of Staff Legal Bulletin No 14F (October 18 2011) (SLB 14F) the Staff took the view that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as record holders of securities that are deposited at DTC The Staff indicated that shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCs participant list (the DTC Participant List) which is currently available on the Internet at the address provided in SLB 14F When the shareholders broker or bank is not on the DTC participant list SLB 14F advised that the shareholder must obtain proof of ownership from the DTC participant through which the securities are held

The Proposal and a broker letter for each of the Proponents from BNY Mellon Asset Servicing each dated November 292011 (collectively the November 29 Broker Letters) were received by the Company on December 12011 The Company reviewed its records and determined that neither the Proponents nor BNY Mellon Asset Servicing were registered shareholders In accordance with SLB 14F the Company checked the DTC Participant List and determined that BNY Mellon Asset Servicing was not on the DTC Participant List Because neither the Proponents nor its broker were registered shareholders of the Company and because BNY Mellon Asset Servicing did not appear on the DTC Participant List the Company concluded that it had not received proof of ownership from a record holder of the Companys securities and that the Comptroller has failed to meet the eligibility requirements of Rule 14ashy8(b)(2)

On December 122011 within the required 14-day period required by Rule 14a-8(f)(1) the Company notified the Comptroller and the Proponents of the eligibility requirements of Rule 14a-8(b) including the guidance contained in SLB 14F and of the required time frame for a response (the Deficiency Notice) Specifically the Deficiency Notice informed the Proponents of (I) the requirement for a written statement from the record holder of the shares (2) the requirement that only DTC participants should be viewed as record holders of securities that are deposited at DTC (3) how to determine whether a broker or bank is a DTC participant and

2 DCl15980003

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 11: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

(4) the requirement where necessary that two ownership statements be submitted - one from the shareholders broker or bank confirming the shareholders ownership and the other from the DTC participant confirming the broker or banks ownership To assist in the Companys verification process the Deficiency notice requested that the Proponents request that any response letter include a valid DTC participant number Enclosed with the Deficiency Notice were copies of Rule 14a-8 and a copy ofSLB 14F

The Deficiency Notice was received by the Comptroller on December 132011 Accordingly the deadline for the Proponents to submit their response to the Deficiency Notice was December 272011 A copy of the Deficiency Notice and delivery confirmation are attached hereto as Exhibit B

On December 16 20 II the Comptroller responded to the Deficiency Notice by again submitting a letter for each of the Proponents from BNY Mellon Asset Servicing each dated December 16 20 II attached hereto as Exhibit C (the December 16 Broker Letters) The December 16 Brokers Letters are nearly identical to the November 29 Broker Letters but for their date and share the same flaws as the November 29 Broker Letters in that they are not from a record holder of shares As with the November 29 Broker Letters the Company again confirmed that neither the Proponents nor BNY Mellon Asset Servicing were registered holders of the Companys securities The Company then confinned that BNY Mellon Asset Servicing did not appear on the DTC Participants List in accordance with the procedures specified by the Staff in SLB 14F Because BNY Mellon Asset Servicing did not appear on the DTC Participant List the December 16 Broker Letters are not from the record holder of the shares and thus are not sufficient proof of ownership under Rule 14a-8(b )(2)(i) Therefore the Company believes that it may omit the Proposal from its 2012 proxy materials pursuant to Rules 14a-8(b) and 14ashy8(f)(1 )

The Company notes that both the November 29 Broker Letters and the December 16 Broker Letters (together the Brokers Letters) state that the shares are held in custody at The Bank ofNew York Mellon in the name of Cede and Company The Company further notes that it received further timely correspondence from the office of the Comptroller on December 22 20 II asserting without support that the Brokers Letters were in fact from a DTC participant The December 22 letter asserts that BNY Mellon Asset Servicing is but another name for The Bank of New York Mellon which is the DTC participant that holds the shares as custodian for the Proponents The Company also notes that it received untimely correspondence from the office of the Comptroller on January 18201221 days after the deadline for responding to the deficiencies noted in the Deficiency Notice Because the January 18 2012 letter was received well beyond the deadline for responding to the Deficiency notice and thus nothing contained therein could remedy the aforementioned deficiencies we do not address it here

Regardless of the assertions of the office of the Comptroller the facts do not change The letter received by the Company was from BNY Mellon Asset Servicing When the Company followed the verification procedures outlined in SLB 14F BNY Mellon Asset Servicing did not appear as a record holder of the Companys shares If The Bank ofNew York Mellon was the DTC participant that held the shares for the Proponent then according to the guidance in SLB 14F the proof of ownership should have come from the Bank of New York Mellon Rule 14a-8

3 DCl15980oo3

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 12: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

puts the burden on the Proponent to provide proof of their eligibility to submit a proposal Here the Proponent has not met that burden

Accordingly the Company respectfully requests confirmation that the Staffwill not recommend enforcement action to the Commission if the Company excludes the Shareholder Proposal based on Rules l4a-8(b) and l4a-8(f)(I) because the Proponents have failed to provide proof of their eligibility to submit the Proposal

If the Staff does not concur with the Companys position we would appreciate an

opportunity to confer with the Staff concerning this matter prior to the determination of the Staffs final position In addition the Company requests that the Proponent copy the undersigned on any response it may choose to make to the Staff pursuant to Rule 14a-8(k)

Please contact the undersigned or Joel Trotter of Latham amp Watkins LLP at (202) 637-2165 to discuss any questions you may have regarding this matter

Very truly yours

M~ Senior Vice President General Counsel and Secretary

Enclosures

cc Kenneth P Sylvester Office of the Comptroller Joel H Trotter Latham amp Watkins LLP

4 DC115980003

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 13: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Exhibit A

Shareholder Proposal

DCIIS98000J 039337-0026

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 14: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

November 29 2011

Mr Michael J OBrien Secretary Omnicom Group Inc 437 Madison Avenue New York NY 10022

Dear Mr OBrien

I write to you on behalf of the Comptroller of the City of New York John C Liu The Comptroller is the custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and custodian of the New York City Board of Education Retirement System (the Systems) The Systems boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and vote of stockholders at the Companys next annual meeting

Therefore we offer the enclosed proposal for the consideration and vote of shareholders at the Companys next annual meeting It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 and I ask that it be included in the Companys proxy statement

Letters from The Bank of New York Mellon Corporation certifying the Systems ownership for over a year of shares of Omnicom Group Inc common stock are enclosed Each System intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

We would be happy to discuss the proposal with you Should the Board of Directors decide to endorse its provision as corporate policy we will withdraw the proposal from

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

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12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 15: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

OBrien Page 2

consideration at the annual meeting If you have any questions on this matter please feel free to contact me at 1 Centre Street Room 629 New York NY 10007 phone (212) 669-2013

Very truly yours

i~~3 ~h--~ Kenneth B Sylvester Assistant Comptroller of Pension Policy

KSma

Enclosures

Omnicom Group Inc - EEO Report Disclosure 2012

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 16: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Annual Disclosure of EEO-l Data

Submitted by New York City Comptroller John C Liu on behalf of the New York City Pension Funds

RESOLVED Shareholders request the Board of Directors to adopt and enforce a policy

requiring Omnicom Group Inc to disclose its EEO-l data--a comprehensive breakdown of the

Companys workforce by race and gender across all employment categories--in its annual

corporate social responsibility (CSR) or sustainability report beginning in 2012

SUPPORTING STATEMENT

Despite federal and state laws forbidding employment discrimination on the basis of race

allegations of racial discrimination persists in some industries and in recent years a number of

companies have agreed to pay millions of dollars in legal settlements of class actions alleging

racial discrimination

A study addreSSing racial discrimination in the advertising industry Research Perspectives on

Race and Employment in the Advertising Industry (Bendick and Egan Economic Consultants

Inc 2009) found that

bull Racial disparity is 38 worse in the advertising industry than in the overall US labor

market

bull The discrimination divide between advertising and other US industries is more than

twice as bad as it was 30 years ago

bull Black college graduates working in advertising earn 80 cents for every dollar earned by

their equally-qualified White counterparts

bull About 16 of large advertising firms employ no Black managers or profeSSionals a rate

60 higher than in the overall labor market and

bull Black managers and profeSSionals in the industry are only one-tenth as likely as their

White counterparts to earn $100000 a year

Numerous studies have found that workplace diversity provides a competitive advantage by

generating diverse valuable perspectives creativity and innovation increased productivity and

morale while eliminating the limitations of groupthink

Given compelling evidence of the positive effects of diversity on long-term value creation

Omnicom Group should continuously seek to increase the diversity of its workforce Full and

transparent disclosure ofthe Companys EEO-l data would drive management and the Board of

Directors to pursue continuous performance improvements in the Companys diversity

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 17: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

programs the full integration of diversity into its culture and practices and the strengthening

of its reputation and accountability to its shareholders In addition the information could be

useful to investors in assessing the Companys progress on hiring retaining and promoting

minority and female employees over the long-term

Given that the Company annually files an EEO-l report with the Equal Employment Opportunity

Commission the report could be made available to shareholders at a minimal additional cost

We urge shareholders to vote FOR the proposal

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 18: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

~ BNY MELLON

ASSET SERVICING

Novcmber 2920 II

To Whom It May Concern

Re Omincom Goup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continllollsly held in custody from November 29 2010 through today at The Bank of New York Mellon in the name o r ecde and Company for the New York City Employccs Retirement System

The New York City Emplo)ccs Retirement System 253931 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sinccnly

Richard Blanco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 19: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

~ BNY MELLON

ASSET SERVICING

NOcmbcr 292011

To Whom It May Concern

Re Omincol11 Gmup Inc Cusip 681919106

Dear MauamcSir

The purposc of this letter is to provide you iith the holdings for the above referenced asset continuously helu in custody tiom Novcmber 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the Ncw York City Teachers Retirement System

The Nev York City Tcachers Retircmcnt System 256452 shares

Pleasc do not hesitatc to contact me should you have any specific concerns or questions

Sinccrcl)

Richard Blanco Vice Presidcnt

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 20: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

~ BNY MELLON

ASSET SERVICING

November 292011

To Whom It Ma) Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody fiom November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Police Pension Fund

The New York City Police Pension Fund 130176 shares

Please do not hesitate to contact me should you have any specific concerns or questions

Sincerely

t~ Richard Blanco Vice President

One Wall Street New York NY 10286

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

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12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

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12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 21: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

BNY MELLON

ASSET SERVICING

November 29 20 II

To Whom It May Concern

Re Omincom Group Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuously held in custody from November 29 20 IO through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Fire Depat1ment Pension Fund

The New York City Fire Department Pension Fund 43378 shares

Please do not hesitate to contact mc should you have any specific concerns or questions

Sincerely

Richard l3Ianco Vice President

One Wall Street New York NY 10286

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 22: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

~ BNY MELLON

ASSET SERVICING

November 29 2011

To Whom It May Concern

Re Omincom G-oup Inc Cusip 681919106

Dear MadameSir

The purpose of this letter is to provide you with the holdings for the above referenced asset continuousl) held in custody from November 29 2010 through today at The Bank of New York Mellon in the name of Cede and Company for the New York City Board of Education Retirement System

The New York City Board of Education Retirement System 14010 shares

Please do not hesitate to contact me should YOll havc any specific concerns or questions

Sincerely

Richard Blanco Vice President

One Wall Street New York NY 10286

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 23: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Exhibit B

Deficiency Notice

6 DCI )5980003

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 24: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Brlan D Miller

Direct Dial (202) 637middot2332

Brian Millerlwcom

555 Eleventh Street NW Suite 1000

Washington DC 20004middot1304

Tel +12026372200 Fax +12026372201

wwwlwcom

FIRM I AFFILIATE OFFICES LATH AMampWAT KIN SLLP Abu Dhabi Moscow

Barcelona Munich

Beijing New Jersey

Boston New York

Brussels Orange County

Chicago Paris

Doha Riyadh

Dubai RomeDecember 122011 Frankfurt San Diego

Hamburg San Francisco

Hong Kong Shanghai

Houston Silicon Valley

London SingaporeVIAFEDEX Los Angeles Tokyo

Madrid Washington DC

MilanMr Kenneth D Sylvester Assistant Comptroller of Pension Policy Office of the Comptroller 1 Centre Street New York NY 10007-2341

Re Shareholder Proposal

Dear Mr Sylvester

On December 1 2011 Omnicom Group Inc (Omnicom) received a letter from you on behalf of the Comptroller of the City of New York John C Liu as custodian and a trustee of the New York City Employees Retirement System the New York City Fire Department Pension Fund the New York City Teachers Retirement System and the New York City Police Pension Fund and as custodian of the New York City Board of Education Retirement System (collectively the Systems) submitting a shareholder proposal (the Proposal) for consideration at the Omnicom 2012 Annual Meeting of Shareholders

Your letter indicates that the Systems intended for the Proposal to meet the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (Rule 14a-8) including the requirement of continuous ownership of the required share value from at least one year prior to the date on which the Systems submitted the Proposal until after the date of the applicable shareholder meeting However the Systems do not appear in Omnicoms records as a shareholder And while we are in receipt of the letters from BNY Mellon Asset Servicing as described below these letters do not meet the requirements established in Staff Legal Bulletin No 14F (SLB No 14F) (enclosed) in order to verify the Systems eligibility to submit a proposal pursuant to Rule 14a-8 As such the Proposal does not meet the requirements of Rule 14a-8(b)

In order for the Proposal to be properly submitted you must provide Omnicom with the proper written evidence that the Systems meet the share ownership and holding requirements of Rule 14a-8(b) Under Rule 14a-8(b) at the time the Systems submit the Proposal they must prove their eligibility to do so to Omnicom by submitting either

DC15791163

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 25: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

December 12 2011 Page 2

LATHAMampWATKI NSLLP

bull a written statement from the record holder of the Systems securities (usually a broker or bank) verifying that at the time the Systems submitted the Proposal the Systems continuously held at least $2000 in market value or 1 of Omnicom s securities entitled to be voted on the Proposal at the meeting for at least one year by the date the Systems submitted the Proposal or

bull a copy of a Schedule 13D Schedule 13G Form 3 Form 4 Form 5 or amendments to those documents or updated forms reflecting the Systems ownership of the shares as of or before the date on which the one-year eligibility period begins

In addition the Systems must also submit a written statement that they intend to continue to hold the securities through the date ofOmnicoms Annual Meeting of Shareholders

Pursuant to SLB No 14F for purposes of establishing eligibility to submit a proposal pursuant to Rule 14a-8 only banks that are participants at the Depository Trust Company (DTC) should be viewed as record holders of securities that are deposited at DTC Thus shareholders must obtain proof of ownership from the DTC participant through which the securities are held in order to establish eligibility to submit a proposal BNY Mellon Asset Servicing is not a DTC participant and as such it cannot be the record holder of the Systems securities

In order to establish the Systems eligibility to submit the Proposal you will need to obtain proof of ownership from the DTC participant through which the securities are held You should be able to identify this DTC participant by asking your broker or bank If the DTC participant knows the Systems brokers or banks holdings but does not know the Systems holdings you may satisfy the proof of eligibility requirements by obtaining and submitting two proof of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year - one from the Systems broker or bank confirming the Systems ownership and the other from the DTC participant confirming the broker or banks ownership To aid in the verification process please ask that the letter from the DTC participant include a valid DTC participant number

To comply with Rule 14a-8(f) you must postmark or transmit your response to this notice of procedural defect within 14 calendar days of receiving this notice For your information we have attached a copy of Rule 14a-8 regarding shareholder proposals and SLB No 14F

~~ ~~ of Latham amp Watkins LLP

cc Michael J OBrien Omnicom Group Inc

Enclosures

DC15791163

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

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12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 26: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

5728 Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules)

Rule 14a-8 Shareholder Proposals This section addresses when a company must include a shareholders proposal in its proxy

statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders In summary in order to have your shareholder proposal included on a companys proxy card and included along with any supporting statement in its proxy stateshyment you must be eligible and follow certain procedures Under a few specific circumstances the company is permitted to exclude your proposal but only after submitting its reasons to the Commission We structured this section in a question-and-answer format so that it is easier to understand The references to you are to a shareholder seeking to submit the proposal

(a) Question 1 What is a proposal

A shareholder proposal is your recommendation or requirement that the company andor its board of directors take action which you intend to present at a meeting of the companys shareholders Your proposal should state as clearly as possible the course of action that you believe the company should follow If your proposal is placed on the companys proxy card the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval or abstention Unless otherwise indicated the word proposal as used in this section refers both to your proposal and to your corresponding statement in support of your proposal (if any)

(b) Question 2 Who is eligible to submit a proposal and how do I demonstrate to the company that I am eligible

(1) In order to be eligible to submit a proposal you must have continuously held at least $2000 in market value or 1 of the companys securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal You must continue to hold those securities through the date of the meeting

(2) If you are the registered holder of your securities which means that your name appears in the companys records as a shareholder the company can verify your eligibility on its own although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders However if like many shareholders you are not a registered holder the company likely does not know that you are a shareholder or how many shares you own In this case at the time you submit your proposal you must prove your eligibility to the company in one of two ways

(i) The first way is to submit to the company a written statement from the record holder of your securities (usually a broker or bank) verifying that at the time you submitted your proposal you continuously held the securities for at least one year You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders or

(ii) The second way to prove ownership applies only if you have filed a Schedule 13D Schedule 130 Form 3 Form 4 andor Form 5 or amendments to those documents or updated forms reflecting your ownership of the shares as of or before the date on which the one-year

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(IO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 27: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5729

eligibility period begins If you have filed one of these documents with the SEC you may demshyonstrate your eligibility by submitting to the company

(A) A copy of the schedule andlor form and any subsequent amendments reporting a change in your ownership level

(B) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement and

(C) Your written statement that you intend to continue ownership of the shares through the date of the companys annual or special meeting

(c) Question 3 How many proposals may I submit

Each shareholder may submit no more than one proposal to a company for a particular shareholders meeting

(d) Question 4 How long can my proposal be

The proposal including any accompanying supporting statement may not exceed 500 words

(e) Question 5 What is the deadline for submitting a proposal

(1) If you are submitting your proposal for the companys annual meeting you can in most cases find the deadline in last years proxy statement However if the company did not hold an annual meeting last year or has changed the date of its meeting for this year more than 30 days from last years meeting you can usually find the deadline in one of the companys quarterly reports on Form IO-Q (sect 249308a of this chapter) or in shareholder reports of investment comshypanies under sect 27030d-l of this chapter of the Investment Company Act of 1940 In order to avoid controversy shareholders should submit their proposals by means including electronic means that permit them to prove the date of delivery

(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting The proposal must be received at the companys principal executive offices not less than 120 calendar days before the date of the companys proxy statement released to shareholders in connection with the previous years annual meeting However if the company did not hold an annual meeting the previous year or if the date of this years annual meeting has been changed by more than 30 days from the date of the previous years meeting then the deadline is a reasonable time before the company begins to print and send its proxy materials

(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting the deadline is a reasonable time before the company begins to print and send its proxy materials

(f) Question 6 What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this Rule 14a-8

(1) The company may exclude your proposal but only after it has notified you of the problem and you have failed adequately to correct it Within 14 calendar days of receiving your proposal the company must notify you in writing of any procedural or eligibility deficiencies as well as of the time frame for your response Your response must be postmarked or transmitted electronically no later than 14 days from the date you received the companys notification A company need not provide you such notice of a deficiency if the deficiency cannot be remedied such as if you fail to submit a proposal by the companys properly determined deadline If the company intends to exclude the proposal it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below Rule 14a-8(j)

(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 28: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5730

(g) Question 7 Who has the burden of persuading the Commission or its staff that my proposal can be excluded

Except as otherwise noted the burden is on the company to demonstrate that it is entitled to exclude a proposal

(h) Question 8 Must I appear personally at the shareholders meeting to present the proposal

(1) Either you or your representative who is qualified under state law to present the proposal on your behalf must attend the meeting to present the proposal Whether you attend the meeting yourself or send a qualified representative to the meeting in your place you should make sure that you or your representative follow the proper state law procedures for attending the meeting andor presenting your proposal

(2) If the company holds its shareholder meeting in whole or in part via electronic media and the company permits you or your representative to present your proposal via such media then you may appear through electronic media rather than traveling to the meeting to appear in person

(3) If you or your qualified representative fail to appear and present the proposal without good cause the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years

(i) Question 9 If I have complied with the procedural requirements on what other bases maya company rely to exclude my proposal

(1) Improper Under State Law If the proposal is not a proper subject for action by shareshyholders under the laws of the jurisdiction of the companys organization

Note to Paragraph (i)(1) Depending on the subject matter some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders In our experience most proposals that are cast as recommendations or requests that the board ofdirectors take specified action are proper under state law Accordingly we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise

(2) Violation ofLaw If the proposal would if implemented cause the company to violate any state federal or foreign law to which it is subject

Note to Paragraph (i)(2) We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law would result in a violation of any state or federal law

(3) Violation of Proxy Rules If the proposal or supporting statement is contrary to any of the Commissions proxy rules including Rule l4a-9 which prohibits materially false or misleading statements in proxy soliciting materials

(4) Personal Grievance Special Interest If the proposal relates to the redress of a personal claim or grievance against the company or any other person or if it is designed to result in a benefit to you or to further a personal interest which is not shared by the other shareholders at large

(5) Relevance If the proposal relates to operations which account for less than 5 percent of the companys total assets at the end of its most recent fiscal year and for less than 5 percent of its net earnings and gross sales for its most recent fiscal year and is not otherwise significantly related to the companys business

(6) Absence of PowerAuthority If the company would lack the power or authority to imshyplement the proposal

(7) Management Functions If the proposal deals with a matter relating to the companys ordinary business operations

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

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Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

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12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

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13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 29: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Rule 14a-8 Regulations 14A 14C and 14N (proxy Rules) 5731

(8) Director Elections If the proposal

(i) Would disqualify a nominee who is standing for election

(ii) Would remove a director from office before his or her term expired

(iii) Questions the competence business judgment or character of one or more nominees or directors

(iv) Seeks to include a specific individual in the companys proxy materials for election to the board of directors or

(v) Otherwise could affect the outcome of the upcoming election of directors

(9) Conflicts with Companys Proposal If the proposal directly conflicts with one of the companys own proposals to be submitted to shareholders at the same meeting

Note to Paragraph (i)(9) A companys submission to the Commission under this Rule 14a-8 should specify the points of conflict with the companys proposal

(10) Substantially Implemented If the company has already substantially implemented the proposal

Note to Paragraph (i)(10) A company may exclude a shareholder proposal that would provide an advisory vote or seek future advisory votes to approve the compensation of executives as disclosed pursuant to Item 402 of Regulation S-K (sect 229402 of this chapter) or any successor to Item 402 (a say-on-pay vote) or that relates to the frequency of say-on-pay votes provided that in the most recent shareholder vote required by sect 240 14a-2 I (b) of this chapter a single year (ie one two or three years) received approval of a majority of votes cast on the matter and the company has adopted a policy on the frequency of say-on-pay votes that is consistent with the choice of the majority of votes cast in the most recent shareholder vote required by sect 24014a-21(b) of this chapter

(11) Duplication If the proposal substantially duplicates another proposal previously subshymitted to the company by another proponent that will be included in the companys proxy materials for the same meeting

(12) Resubmissions If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the companys proxy materials within the preceding 5 calendar years a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received

(i) Less than 3 of the vote if proposed once within the preceding 5 calendar years

(ii) Less than 6 of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years or

Effective September 20 2011 Rule 14a-8 was amended by revising paragraph (i)(8) as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 ICshy29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective April 4 2011 Rule 14a-8 was amended by adding Note to Paragraph (i)(lO) as part of rule amendments implementing the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and golden parachute compensation arrangements See SEC Release Nos 33-9178 34-63768 January 25 2011 Compliance Date April 4 2011 For other compliance dates related to this release see SEC Release No 33-9178

(BULLETIN No 261 10-14-11)

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 30: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION

Rule 14a-8 Regulations 14A 14C and 14N (Proxy Rules) 5732

(iii) Less than 10 of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years and

(13) Specific Amount ofDividends If the proposal relates to specific amounts of cash or stock dividends

(j) Question 10 What procedures must the company follow if it intends to exclude my proposal

(1) If the company intends to exclude a proposal from its proxy materials it must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission The company must simultaneously provide you with a copy of its submission The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy if the company demonstrates good cause for missing the deadline

(2) The company must file six paper copies of the following

(i) The proposal

(ii) An explanation of why the company believes that it may exclude the proposal which should if possible refer to the most recent applicable authority such as prior Division letters issued under the rule and

(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law

(k) Question 11 May I submit my own statement to the Commission responding to the companys arguments

Yes you may submit a response but it is not required You should try to submit any response to us with a copy to the company as soon as possible after the company makes its submission This way the Commission staff will have time to consider fully your submission before it issues its response You should submit six paper copies of your response

(1) Question 12 If the company includes my shareholder proposal in its proxy materials what information about me must it include along with the proposal itself

(1) The companys proxy statement must include your name and address as well as the number of the companys voting securities that you hold However instead of providing that information the company may instead in~lude a statement that it will provide the information to shareholders promptly upon receiving an oral or written request

(2) The company is not responsible for the contents of your proposal or supporting statement

(m) Question 13 What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal and I disagree with some of its statements

(1) The company may elect to include in its proxy statement reasons why it believes shareholders should vote against your proposal The company is allowed to make arguments reflecting its own point of view just as you may express your own point of view in your proposals supporting statement

(2) However if you believe that the companys opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule Rule 14a-9 you should promptly send to the Commission staff and the company a letter explaining the reasons for your view along with a copy of the companys statements opposing your proposal To the extent possible your letter should include specific factual information demonstrating the inaccuracy of the companys claims Time permitting you may wish to try to work out your differences with the company by yourself before contacting the Commission staff

(BULLETIN No 261 10-14-11)

Rule 14a-9 Regulations 14A 14C and 14N (proxy Rules) 5733

(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials so that you may bring to our attention any materially false or misleading statements under the following timeframes

(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal or

(ii) In all other cases the company must provide you with a copy of its opposition statements no later than 30 calendar days before it files definitive copies of its proxy statement and form of proxy under Rule 14a-6

Rule 14a-9 False or Misleading Statements

(a) No solicitation subject to this regulation shall be made by means of any proxy statement form of proxy notice of meeting or other communication written or oral containing any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading

(b) The fact that a proxy statement form of proxy or other soliciting material has been filed with or examined by the Commission shall not be deemed a finding by the Commission that such material is accurate or complete or not false or misleading or that the Commission has passed upon the merits of or approved any statement contained therein or any matter to be acted upon by security holders No representation contrary to the foregoing shall be made

(c) No nominee nominating shareholder or nominating shareholder group or any member thereof shall cause to be included in a registrants proxy materials either pursuant to the Federal proxy rules an applicable state or foreign law provision or a registrants governing documents as they relate to including shareholder nominees for director in a registrants proxy materials include in a notice on Schedule 14N (sect 24014n-1O1) orinclude in any otherrelated communication any statement which at the time and in the light of the circumstances under which it is made is false or misleading with respect to any material fact or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to a solicitation for the same meeting or subject matter which has become false or misleading

Note The following are some examples of what depending upon particular facts and circumstances may be misleading within the meaning of this section

a Predictions as to specific future market values

Effective September 202011 Rule 14a-9 was amended by adding paragraph (c) and redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

Effective September 20 2011 Rule 14a-9 was amended by adding paragraph (c) as part of the amendshyments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34-62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 14 2010)

Effective September 202011 Rule 14a-9 was amended by redesignating Notes (a) (b) (c) and (d) as a b c and d respectively as part of the amendments facilitating shareholder director nominations See SEC Release Nos 33-9259 34-65343 IC-29788 September 15 2011 See also SEC Release Nos 33-9136 34shy62764 IC-29384 (Aug 25 2010) SEC Release Nos 33-9149 34-63031 IC-29456 (Oct 4 2010) SEC Release Nos 33-9151 34-63109 IC-29462 (Oct 142010)

(BULLETIN No 261 10-14-11)

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page

Division of Corporation Finance

12132011 203 PM

Securities and Exchange Commission

Shareholder Proposals

Staff Legal Bulletin No 14F (CF)

Action Publication of CF Staff Legal Bulletin

Date October 18 2011

Summary This staff legal bulletin provides information for companies and shareholders regarding Rule 14a-8 under the Securities Exchange Act of 1934

Supplementary Information The statements in this bulletin represent the views of the Division of Corporation Finance (the ldquoDivisionrdquo) This bulletin is not a rule regulation or statement of the Securities and Exchange Commission (the ldquoCommissionrdquo) Further the Commission has neither approved nor disapproved its content

Contacts For further information please contact the Divisionrsquos Office of Chief Counsel by calling (202) 551-3500 or by submitting a web-based request form at httpsttssecgovcgi-bincorp_fin_interpretive

A The purpose of this bulletin

This bulletin is part of a continuing effort by the Division to provide guidance on important issues arising under Exchange Act Rule 14a-8 Specifically this bulletin contains information regarding

Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

Common errors shareholders can avoid when submitting proof of ownership to companies

The submission of revised proposals

Procedures for withdrawing no-action requests regarding proposals submitted by multiple proponents and

The Divisionrsquos new process for transmitting Rule 14a-8 no-action responses by email

You can find additional guidance regarding Rule 14a-8 in the following bulletins that are available on the Commissionrsquos website SLB No 14 SLB No 14A SLB No 14B SLB No 14C SLB No 14D and SLB No 14E

B The types of brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

1 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

1 Eligibility to submit a proposal under Rule 14a-8

To be eligible to submit a shareholder proposal a shareholder must have continuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the shareholder meeting for at least one year as of the date the shareholder submits the proposal The shareholder must also continue to hold the required amount of securities through the date of the meeting and must provide the company with a written statement of intent to do so1

The steps that a shareholder must take to verify his or her eligibility to submit a proposal depend on how the shareholder owns the securities There are two types of security holders in the US registered owners and beneficial owners2 Registered owners have a direct relationship with the issuer because their ownership of shares is listed on the records maintained by the issuer or its transfer agent If a shareholder is a registered owner the company can independently confirm that the shareholderrsquos holdings satisfy Rule 14a-8(b)rsquos eligibility requirement

The vast majority of investors in shares issued by US companies however are beneficial owners which means that they hold their securities in book-entry form through a securities intermediary such as a broker or a bank Beneficial owners are sometimes referred to as ldquostreet namerdquo holders Rule 14a-8(b)(2)(i) provides that a beneficial owner can provide proof of ownership to support his or her eligibility to submit a proposal by submitting a written statement ldquofrom the lsquorecordrsquo holder of [the] securities (usually a broker or bank)rdquo verifying that at the time the proposal was submitted the shareholder held the required amount of securities continuously for at least one year3

2 The role of the Depository Trust Company

Most large US brokers and banks deposit their customersrsquo securities with and hold those securities through the Depository Trust Company (ldquoDTCrdquo) a registered clearing agency acting as a securities depository Such brokers and banks are often referred to as ldquoparticipantsrdquo in DTC4 The names of these DTC participants however do not appear as the registered owners of the securities deposited with DTC on the list of shareholders maintained by the company or more typically by its transfer agent Rather DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants A company can request from DTC a ldquosecurities position listingrdquo as of a specified date which identifies the DTC participants having a position in the companyrsquos securities and the number of securities held by each DTC participant on that date5

3 Brokers and banks that constitute ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal under Rule 14a-8

In The Hain Celestial Group Inc (Oct 1 2008) we took the position that an introducing broker could be considered a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) An introducing broker is a broker that engages in sales and other activities involving customer contact such as opening customer accounts and accepting customer orders but is not permitted to maintain custody of customer funds and securities6 Instead an introducing broker engages another broker known as a ldquoclearing brokerrdquo to hold custody of

2 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

client funds and securities to clear and execute customer trades and to handle other functions such as issuing confirmations of customer trades and customer account statements Clearing brokers generally are DTC participants introducing brokers generally are not As introducing brokers generally are not DTC participants and therefore typically do not appear on DTCrsquos securities position listing Hain Celestial has required companies to accept proof of ownership letters from brokers in cases where unlike the positions of registered owners and brokers and banks that are DTC participants the company is unable to verify the positions against its own or its transfer agentrsquos records or against DTCrsquos securities position listing

In light of questions we have received following two recent court cases relating to proof of ownership under Rule 14a-87 and in light of the Commissionrsquos discussion of registered and beneficial owners in the Proxy Mechanics Concept Release we have reconsidered our views as to what types of brokers and banks should be considered ldquorecordrdquo holders under Rule 14a-8(b)(2)(i) Because of the transparency of DTC participantsrsquo positions in a companyrsquos securities we will take the view going forward that for Rule 14a-8(b)(2)(i) purposes only DTC participants should be viewed as ldquorecordrdquo holders of securities that are deposited at DTC As a result we will no longer follow Hain Celestial

We believe that taking this approach as to who constitutes a ldquorecordrdquo holder for purposes of Rule 14a-8(b)(2)(i) will provide greater certainty to beneficial owners and companies We also note that this approach is consistent with Exchange Act Rule 12g5-1 and a 1988 staff no-action letter addressing that rule8 under which brokers and banks that are DTC participants are considered to be the record holders of securities on deposit with DTC when calculating the number of record holders for purposes of Sections 12(g) and 15(d) of the Exchange Act

Companies have occasionally expressed the view that because DTCrsquos nominee Cede amp Co appears on the shareholder list as the sole registered owner of securities deposited with DTC by the DTC participants only DTC or Cede amp Co should be viewed as the ldquorecordrdquo holder of the securities held on deposit at DTC for purposes of Rule 14a-8(b)(2)(i) We have never interpreted the rule to require a shareholder to obtain a proof of ownership letter from DTC or Cede amp Co and nothing in this guidance should be construed as changing that view

3 of 8

How can a shareholder determine whether his or her broker or bank is a DTC participant

Shareholders and companies can confirm whether a particular broker or bank is a DTC participant by checking DTCrsquos participant list which is currently available on the Internet at httpwwwdtcccomdownloads membershipdirectoriesdtcalphapdf

What if a shareholderrsquos broker or bank is not on DTCrsquos participant list

The shareholder will need to obtain proof of ownership from the DTC participant through which the securities are held The shareholder should be able to find out who this DTC participant is by asking the shareholderrsquos broker or bank9

If the DTC participant knows the shareholderrsquos broker or bankrsquos holdings but does not know the shareholderrsquos holdings a shareholder could satisfy Rule 14a-8(b)(2)(i) by obtaining and submitting two proof

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

of ownership statements verifying that at the time the proposal was submitted the required amount of securities were continuously held for at least one year ndash one from the shareholderrsquos broker or bank confirming the shareholderrsquos ownership and the other from the DTC participant confirming the broker or bankrsquos ownership

How will the staff process no-action requests that argue for exclusion on the basis that the shareholderrsquos proof of ownership is not from a DTC participant

The staff will grant no-action relief to a company on the basis that the shareholderrsquos proof of ownership is not from a DTC participant only if the companyrsquos notice of defect describes the required proof of ownership in a manner that is consistent with the guidance contained in this bulletin Under Rule 14a-8(f)(1) the shareholder will have an opportunity to obtain the requisite proof of ownership after receiving the notice of defect

C Common errors shareholders can avoid when submitting proof of ownership to companies

In this section we describe two common errors shareholders make when submitting proof of ownership for purposes of Rule 14a-8(b)(2) and we provide guidance on how to avoid these errors

First Rule 14a-8(b) requires a shareholder to provide proof of ownership that he or she has ldquocontinuously held at least $2000 in market value or 1 of the companyrsquos securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposalrdquo (emphasis added)10 We note that many proof of ownership letters do not satisfy this requirement because they do not verify the shareholderrsquos beneficial ownership for the entire one-year period preceding and including the date the proposal is submitted In some cases the letter speaks as of a date before the date the proposal is submitted thereby leaving a gap between the date of the verification and the date the proposal is submitted In other cases the letter speaks as of a date after the date the proposal was submitted but covers a period of only one year thus failing to verify the shareholderrsquos beneficial ownership over the required full one-year period preceding the date of the proposalrsquos submission

Second many letters fail to confirm continuous ownership of the securities This can occur when a broker or bank submits a letter that confirms the shareholderrsquos beneficial ownership only as of a specified date but omits any reference to continuous ownership for a one-year period

We recognize that the requirements of Rule 14a-8(b) are highly prescriptive and can cause inconvenience for shareholders when submitting proposals Although our administration of Rule 14a-8(b) is constrained by the terms of the rule we believe that shareholders can avoid the two errors highlighted above by arranging to have their broker or bank provide the required verification of ownership as of the date they plan to submit the proposal using the following format

ldquoAs of [date the proposal is submitted] [name of shareholder] held and has held continuously for at least one year [number of securities] shares of [company name] [class of securities]rdquo11

As discussed above a shareholder may also need to provide a separate

4 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

written statement from the DTC participant through which the shareholderrsquos securities are held if the shareholderrsquos broker or bank is not a DTC participant

D The submission of revised proposals

On occasion a shareholder will revise a proposal after submitting it to a company This section addresses questions we have received regarding revisions to a proposal or supporting statement

1 A shareholder submits a timely proposal The shareholder then submits a revised proposal before the companyrsquos deadline for receiving proposals Must the company accept the revisions

Yes In this situation we believe the revised proposal serves as a replacement of the initial proposal By submitting a revised proposal the shareholder has effectively withdrawn the initial proposal Therefore the shareholder is not in violation of the one-proposal limitation in Rule 14a-8(c)12 If the company intends to submit a no-action request it must do so with respect to the revised proposal

We recognize that in Question and Answer E2 of SLB No 14 we indicated that if a shareholder makes revisions to a proposal before the company submits its no-action request the company can choose whether to accept the revisions However this guidance has led some companies to believe that in cases where shareholders attempt to make changes to an initial proposal the company is free to ignore such revisions even if the revised proposal is submitted before the companyrsquos deadline for receiving shareholder proposals We are revising our guidance on this issue to make clear that a company may not ignore a revised proposal in this situation13

2 A shareholder submits a timely proposal After the deadline for receiving proposals the shareholder submits a revised proposal Must the company accept the revisions

No If a shareholder submits revisions to a proposal after the deadline for receiving proposals under Rule 14a-8(e) the company is not required to accept the revisions However if the company does not accept the revisions it must treat the revised proposal as a second proposal and submit a notice stating its intention to exclude the revised proposal as required by Rule 14a-8(j) The companyrsquos notice may cite Rule 14a-8(e) as the reason for excluding the revised proposal If the company does not accept the revisions and intends to exclude the initial proposal it would also need to submit its reasons for excluding the initial proposal

3 If a shareholder submits a revised proposal as of which date must the shareholder prove his or her share ownership

A shareholder must prove ownership as of the date the original proposal is submitted When the Commission has discussed revisions to proposals14 it has not suggested that a revision triggers a requirement to provide proof of ownership a second time As outlined in Rule 14a-8(b) proving ownership includes providing a written statement that the shareholder intends to continue to hold the securities through the date of the shareholder meeting Rule 14a-8(f)(2) provides that if the shareholder ldquofails in [his or her] promise to hold the required number of securities through the date of the meeting of shareholders then the company will be permitted to exclude all of [the same shareholderrsquos] proposals from its proxy materials for any meeting held in the following two calendar yearsrdquo With these provisions in

5 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

mind we do not interpret Rule 14a-8 as requiring additional proof of ownership when a shareholder submits a revised proposal15

E Procedures for withdrawing no-action requests for proposals submitted by multiple proponents

We have previously addressed the requirements for withdrawing a Rule 14a-8 no-action request in SLB Nos 14 and 14C SLB No 14 notes that a company should include with a withdrawal letter documentation demonstrating that a shareholder has withdrawn the proposal In cases where a proposal submitted by multiple shareholders is withdrawn SLB No 14C states that if each shareholder has designated a lead individual to act on its behalf and the company is able to demonstrate that the individual is authorized to act on behalf of all of the proponents the company need only provide a letter from that lead individual indicating that the lead individual is withdrawing the proposal on behalf of all of the proponents

Because there is no relief granted by the staff in cases where a no-action request is withdrawn following the withdrawal of the related proposal we recognize that the threshold for withdrawing a no-action request need not be overly burdensome Going forward we will process a withdrawal request if the company provides a letter from the lead filer that includes a representation that the lead filer is authorized to withdraw the proposal on behalf of each proponent identified in the companyrsquos no-action request16

F Use of email to transmit our Rule 14a-8 no-action responses to companies and proponents

To date the Division has transmitted copies of our Rule 14a-8 no-action responses including copies of the correspondence we have received in connection with such requests by US mail to companies and proponents We also post our response and the related correspondence to the Commissionrsquos website shortly after issuance of our response

In order to accelerate delivery of staff responses to companies and proponents and to reduce our copying and postage costs going forward we intend to transmit our Rule 14a-8 no-action responses by email to companies and proponents We therefore encourage both companies and proponents to include email contact information in any correspondence to each other and to us We will use US mail to transmit our no-action response to any company or proponent for which we do not have email contact information

Given the availability of our responses and the related correspondence on the Commissionrsquos website and the requirement under Rule 14a-8 for companies and proponents to copy each other on correspondence submitted to the Commission we believe it is unnecessary to transmit copies of the related correspondence along with our no-action response Therefore we intend to transmit only our staff response and not the correspondence we receive from the parties We will continue to post to the Commissionrsquos website copies of this correspondence at the same time that we post our staff no-action response

12132011 203 PM

1 See Rule 14a-8(b)

2 For an explanation of the types of share ownership in the US see Concept Release on US Proxy System Release No 34-62495 (July 14 2010) [75 FR 42982] (ldquoProxy Mechanics Concept Releaserdquo) at Section IIA

6 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

The term ldquobeneficial ownerrdquo does not have a uniform meaning under the federal securities laws It has a different meaning in this bulletin as compared to ldquobeneficial ownerrdquo and ldquobeneficial ownershiprdquo in Sections 13 and 16 of the Exchange Act Our use of the term in this bulletin is not intended to suggest that registered owners are not beneficial owners for purposes of those Exchange Act provisions See Proposed Amendments to Rule 14a-8 under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders Release No 34-12598 (July 7 1976) [41 FR 29982] at n2 (ldquoThe term lsquobeneficial ownerrsquo when used in the context of the proxy rules and in light of the purposes of those rules may be interpreted to have a broader meaning than it would for certain other purpose[s] under the federal securities laws such as reporting pursuant to the Williams Actrdquo)

3 If a shareholder has filed a Schedule 13D Schedule 13G Form 3 Form 4 or Form 5 reflecting ownership of the required amount of shares the shareholder may instead prove ownership by submitting a copy of such filings and providing the additional information that is described in Rule 14a-8(b)(2)(ii)

4 DTC holds the deposited securities in ldquofungible bulkrdquo meaning that there are no specifically identifiable shares directly owned by the DTC participants Rather each DTC participant holds a pro rata interest or position in the aggregate number of shares of a particular issuer held at DTC Correspondingly each customer of a DTC participant ndash such as an individual investor ndash owns a pro rata interest in the shares in which the DTC participant has a pro rata interest See Proxy Mechanics Concept Release at Section IIB2a

5 See Exchange Act Rule 17Ad-8

6 See Net Capital Rule Release No 34-31511 (Nov 24 1992) [57 FR 56973] (ldquoNet Capital Rule Releaserdquo) at Section IIC

7 See KBR Inc v Chevedden Civil Action No H-11-0196 2011 US Dist LEXIS 36431 2011 WL 1463611 (SD Tex Apr 4 2011) Apache Corp v Chevedden 696 F Supp 2d 723 (SD Tex 2010) In both cases the court concluded that a securities intermediary was not a record holder for purposes of Rule 14a-8(b) because it did not appear on a list of the companyrsquos non-objecting beneficial owners or on any DTC securities position listing nor was the intermediary a DTC participant

8 Techne Corp (Sept 20 1988)

9 In addition if the shareholderrsquos broker is an introducing broker the shareholderrsquos account statements should include the clearing brokerrsquos identity and telephone number See Net Capital Rule Release at Section IIC(iii) The clearing broker will generally be a DTC participant

10 For purposes of Rule 14a-8(b) the submission date of a proposal will generally precede the companyrsquos receipt date of the proposal absent the use of electronic or other means of same-day delivery

11 This format is acceptable for purposes of Rule 14a-8(b) but it is not mandatory or exclusive

12 As such it is not appropriate for a company to send a notice of defect for multiple proposals under Rule 14a-8(c) upon receiving a revised proposal

7 of 8

Staff Legal Bulletin No 14F (Shareholder Proposals) httpwwwsecgovinterpslegalcfslb14fhtm

12132011 203 PM

13 This position will apply to all proposals submitted after an initial proposal but before the companyrsquos deadline for receiving proposals regardless of whether they are explicitly labeled as ldquorevisionsrdquo to an initial proposal unless the shareholder affirmatively indicates an intent to submit a second additional proposal for inclusion in the companyrsquos proxy materials In that case the company must send the shareholder a notice of defect pursuant to Rule 14a-8(f)(1) if it intends to exclude either proposal from its proxy materials in reliance on Rule 14a-8(c) In light of this guidance with respect to proposals or revisions received before a companyrsquos deadline for submission we will no longer follow Layne Christensen Co (Mar 21 2011) and other prior staff no-action letters in which we took the view that a proposal would violate the Rule 14a-8(c) one-proposal limitation if such proposal is submitted to a company after the company has either submitted a Rule 14a-8 no-action request to exclude an earlier proposal submitted by the same proponent or notified the proponent that the earlier proposal was excludable under the rule

14 See eg Adoption of Amendments Relating to Proposals by Security Holders Release No 34-12999 (Nov 22 1976) [41 FR 52994]

15 Because the relevant date for proving ownership under Rule 14a-8(b) is the date the proposal is submitted a proponent who does not adequately prove ownership in connection with a proposal is not permitted to submit another proposal for the same meeting on a later date

16 Nothing in this staff position has any effect on the status of any shareholder proposal that is not withdrawn by the proponent or its authorized representative

httpwwwsecgovinterpslegalcfslb14fhtm

Home | Previous Page Modified 10182011

8 of 8

Exhibit C

December 16 Broker Letters

7 DC1I5980003

THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER

1 CENTRE STREET NEW YORK NY 10007-2341

John C Liu COMPTROLLER

December 16 2011

VIA OVERNIGHT DELIVERY

Mr Brian D Miller Lalham amp Watkins LLP 555 Eleventh Street NW Suite 1000 Washington DC 20004-1304

Dear Mr Miller

In response to your letter sent to Kenneth Sylvester dated November December 12 2011 regarding the eligibility of the New York City Employees Retirement System The New York City Fire Department Pension Fund The New York City Teachers Retirement System The New York City Police Pension Fund and the New York City Board of Education Retirement System (the Systems) to submit a stockholder proposal to Omnicom Group Inc in accordance with SEC Rule 14a-8 (b) I enclose letters from the Systems custodian bank The Bank of New York Mellon Corporation certifying that at the time the stockholder proposal was submitted to Omnicom Group Inc each held continuously for over a year at least $2000 worth of shares of Omnicom Group Inc common stock

I hereby declare that each intends to continue to hold at least $2000 worth of these securities through the date of the Companys next annual meeting

Enclosure

~ BNY MELLON

BNY Mel lon Asset Servic ing

Iklim l r I (t 20 11

Cusip 681919 106

The rU I -- of lid kuc r i~ If) pnnmiddotide YOll with the holdings for the above referenced asset c()1Jtin ll I~k illld ill cllstody Ir l111 Delcmber L 201 0 th ro ugh today al The Bank of New Yo rk Ivk ll llll I illL naln d ( lde and (olllpan for the Nc York eil) Teachers Retirement System

256452 shares

Pkl ~~ I IH h ~sitlk 1) ul lltacllllC shnuld you have any speeitic concerns or qLlcsl ions

~ I Il CC I

(L-ltfJ a -RiehLlrd ~bIICO

ViCL P i c - dli ll

One Wa llSlreet New York NY 10286

~ BNY MELLON

BNY Mell on Asset SerVici ng

bull

Ht ()1I11l 0 Il1 j HUP Illc Cusip 681919 106

The pmp h gt oi th is kllcr i (0 proidc you ilh 1he holdings for the above referenced asset contill ll (ll I~ [HllI ill Cll study flOl1 December 1 2010 th roug h today at The Bank of New York Mellon ill Ihe nIIlH II i Cld( wId (ol11pan) tor the New York Ci ty Board oj Education Retirement System

140 10 shares

P kD~l d ll 1101 IK sil~lll ) L untwt me should )UlI ba vl allY specific concerns or questions

Since l 1

lZicil )I(1 -hnc() Vkc l ridl 111

One Wal l Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv IC ing

He OwilltOIll (roup luc Cusi ll ()SI9191O()

Tilt pllt l(IC or (hi e klllr i to provick you wi th the holdings for the above referenced asset continuPIIsly hlld in lu lody from Dccclllhcr 1 2010 through today at The Bank of New York Mclloll ill till IWH1( ui( xk and Company fo r the Ncmiddot York City Fire Department Pension Fund

The N yp rk Cij~ J i l [)vpartmcnt nsion Fund 43378 shares

Plla-c dll IHH hls iwho lonlK1l1( should you have any specific concerns or questions

Sincere

Ridwrd nllI1co Vice PrLi dcIl L

One Wa ll Street New York NY 10286

~

BNY MELLON

BNY Mellon Asset Servicing

T 0 Who tll 1 iv10) (O il CU1l

Ik Cusip 68191) 106

[) lar ~1 l d iJl ll eSir

Till p llllO~L of lilimiddot kif i~ ti l provide you illl the ho ldings fo r the above rcierc ilced asset (otllinw IY held in c lltody It llll D CCCllbl1 I 20 10 through today at The l3ank 0 1 New York rvk 1on lil Ill Ilm llC nlTedl and Company fo r the New York City Employees Retirement System

253 93 1 shares

Please I 11 1[ hl~ i t tL tI l onla-l 1110 sho ul d you have any speci lic concerns or questions

Si nccro l

Richard nLl rico Vice Pn idcnl

One W~ I I Stred New York NY 10286

~

BNY MELLON

BNY Mellon Asset Serv Icing

December 16 11111

I~c O lllim ulIl Cro ll I Inc

gttar I hlam~iSir

The pll rpogtl of Ihi kiter is to prm ide you with Ihe ho ldings for the above re ferenced asset COll ti lll lOllSly Illld ill ~ usll)dy from December I 2010 through today at The Ball k of New York Mdlon ir 111( nillllL or(c(k ami Company for the New York CilYPolice Pension Fund

J 30176 shares

Pkasc du no hl siwh to contact me should yo u have any speci fic concerns or questions

Rilhard l ~1allco

Vice Pn tiCIlI

One W~II Sheet New York NY 10286

Page 31: UNITED STATES SECURITIES AND EXCHANGE COMMISSION D.C. 20549-4561 · 2012. 3. 9. · UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561 QIVISIONOF CORPORATION
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